By Emma Farge, Lorraine Turner and John Irish
In August, as rebels fought forces loyal to President Muammar Gaddafi, two representatives of a British business consortium took a “rather long and arduous ferry journey from Malta” to the North African country.
“To describe it as a ferry would be very polite,” according to an executive at a London-based global engineering company, whose interests the two men represented. “I think it was a trawler.”
The men travelled to Libya at the invitation of the rebel administration. Britain, along with France and the United States, had given political and military support for the uprising against Gaddafi and sponsored the rebel leadership, the National Transitional Council (NTC). This was a chance to close some deals.
“We had people on the ground in Misrata,” said the businessman, who spoke by phone on condition of anonymity. “You could still hear ordnance from the centre of Misrata, so it was very much an ongoing situation. But they were already talking about training and equipping fire brigades, training and equipping police.”
The visitors keep coming. In the lobby of the Tibesti Hotel in the rebel stronghold of Benghazi, opportunists mix with diplomats, journalists and aid workers. With NATO’s help, the rebels have deposed Gaddafi and now control Tripoli, the capital. Elsewhere fierce fighting continues and Gaddafi remains holed up. The country has yet to pay its workers, write a new constitution or even name a transitional government. But it is a land with deep pockets, and plenty of new friends.
French President Nicolas Sarkozy and British Prime Minister David Cameron received a heroes’ welcome last week when they became the first western leaders to visit since Gaddafi’s ouster. Interim leader Abdel Jalil said the rebels’ allies could expect preferential treatment in return for their help.
It was a clear signal that countries which had not backed the NATO bombing campaign, including Russia, China and Germany, or which were slow to denounce Gaddafi, like Italy, stand to lose out.
But if French and British politicians are tallying up the contracts, business executives are leaving little to chance. Foreign companies withdrew from Libya at the outset of the NATO bombing campaign; sanctions imposed on Gaddafi’s regime since February have added to the difficulty of doing business.
Despite this, dozens of executives from France, Britain, Italy and other countries have spent months building ties with potential Libyan partners. In a country fractured by tribe and politics, they say it is relationships that will prove decisive.
The potential profits are huge. While there are pockets of damage to infrastructure and former Gaddafi command centres, the country is in far better shape than Iraq was after the fall of Saddam. At the same time, Libya needs new investment in everything from schools to services. According to the French business federation, Libya should offer around $200 billion in investment opportunities over the next 10 years. With a population of just over 6 million and Africa’s largest oil reserves, it has plenty to spend. Up to $170 billion worth of frozen Gaddafi-era assets alone should help pay for reconstruction.
Here’s how companies are playing this new front in the latest scramble for Africa.
GET IN QUICK, IF YOU DARE
Western firms, including trading houses Vitol, Trafigura and Gunvor have already been busy. A London-based team for Vitol sold oil products to the rebels in large volumes as early as April, and helped ship their first crude oil cargo. Trafigura expressed interest, although it is not clear if anydeals were concluded.
France landed executives in Benghazi in June and July, according to Michel Casals, head of the Franco-Libyan Chamber of Commerce.
“There’s no point going when people are not ready, but we can’t go in six months when everybody has already been there,” says Thierry Courtaigne, director general of French business lobby Medef International, which represents the interests of France’s top companies overseas.
At the same time, some firms remain wary of doing business with the rebels in case they break international sanctions. Though those sanctions are now easing — Europe and the United Nations have eased theirs — U.S. firms in particular are hesitant. One engineering executive expressed optimism about the potential in Libya “once things get going” and said he has been attempting to rekindle old relationships. But he, along with another U.S. company official, said sanctions left them unsure about how much they can do. Many told Reuters they are waiting for guidance from Washington.
CONSIDER A FIXER
There are ways to work as you wait. These include employing free agents known as “fixers,” who offer on-the-ground intelligence, security, networking, and deniability in case of a legal challenge. Often former British military men, fixers are widely used by companies in resource-rich countries with weak governments. In Libya you can find a small community of them in hotels like the Tibesti — Benghazi’s main networking hub.
One of their number is a former senior officer in Britain’s SAS special forces. In his early 60s and with a mane of salt-and-pepper hair, John Holmes is often seen with two other men at the Tibesti. He spends much of his time in the lobby, trying to catch the ear of NTC officials who could help open doors in the oil sector.
NTC officials say Holmes is working on behalf of British firm Heritage Oil, trying to finance field security and maintenance work in return for a stake in the country’s oil production. He refused to talk to Reuters, describing himself as a private person. Heritage also declined to comment on whether the firm had hired him. “They’ve been very aggressive, going out on a limb,” said one rival.
Others are more approachable, but still decline to be identified or say who they are working for because of the sensitive nature of their work. Many fixers are fresh from similar assignments in Iraq. One, dressed in desert camouflage and smoking British Lambert & Butler cigarettes, was responsible for liaising with local Iraqis. He doesn’t speak Arabic but says he has a mantra for life: have respect, be courteous and don’t promise something you can’t deliver.
The job includes giving clients a flavour of local conditions and pinpointing opportunities. In one memo sent by a fixer and seen by Reuters, the author details meetings with Libyan officials and discusses a strategy for gaining access to remote oil facilities to check out the wartime damage. Such information could be priceless to oil companies weighing Libya’s still-considerable risks against the huge potential rewards.
GET GOVERNMENT HELP
Political support can help with access, and with the law. Sarkozy has hotly denied talk of “under the table deals for Libya’s riches”, including reports that in return for French help, oil group Total will be given preferential access to Libyan oil. Nonetheless, Paris has been frank about the payback it expects in return for spearheading NATO’s mission.
“The President took political and military risks, and all that creates an environment where the Libyan authorities and the people know what debt they owe France,” French Trade minister Pierre Lellouche told a Sept. 6 symposium on the NTC arranged by the Franco-Libyan chamber of commerce. “We aren’t going to get embarrassed by helping our companies benefit from this advantage.”
In April, when Vitol shipped out rebel-produced oil, it had backing from the office of British Foreign Secretary William Hague, oil and diplomatic sources say.
A special group referred to by UK media as a secret oil cell, backed by British Prime Minister David Cameron, was staffed by a handful of officials and supported by Britain’s MI6 secret.